In TNT Cable Contractors v. Director, Department of Workforce Services 1 (2015 Ark. App 79), the appeals court upheld a determination that cable installers were employees and subject to payment of unemployment-insurance taxes. Under Arkansas Code Annotated section 11-10-210(e), a worker is considered subject to unemployment taxes “unless and until” the director is satisfied that:
(1) Such individual has been and will continue to be free from control and direction in connection with the performance of he service, both under his or her contract for performance of service and in fact;
(2) the service is performed either outside the usual course of business for which the service is performed or is performed outside all the places of business of the enterprise for which the service is performed; and
(3) The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.
The appeal focused on whether the service was outside the usual course of business for TNT. TNT argued that it sourced labor and was not in the business of installing cable. The court said:
“The evidence that was clearly important to the Board in reaching its decision was undisputed. TNT was not paid until the cable installation was complete. The Board, therefore, reasoned that [the cable company] was paying TNT for installation jobs, not simply for referrals, making the installers an integral part of completing those installations and part of the usual course of business for which the service was performed — not outside that course of business.”
Because the statute required that all three part be satisfied, neither the Board or the appeals court reviewed the other parts of the test. This decision demonstrates the difficultly of classifying workers as independent contractors under the ABC test.
